Foodstuff on display

Obinna Chima

The FSDH Securities Limited has forecast a 67 basis points drop in inflation, from 11.7 per cent in August, to 11.03 per cent in September.

The National Bureau of Statistics (NBS) is expected to release inflation figure for the month of September today. The research and investment firm in a report at the weekend projected that year-on-year inflation in September.

“Our estimate points to an increase of 80 basis points in Composite Consumer Price Index (CCPI) to 137.7 points in September which will produce an inflation rate of 11.03 per cent, 67 basis points lower than 11.7 per cent recorded in the month of August.

“The CCPI would have to increase by 1.42 per cent between August and September to produce an inflation rate higher than 11.70 per cent. “Meanwhile, it is unlikely that CCPI would increase by 1.42 per cent between the two months.

“We note that the weight of beans in the food basket is not substantial because consumers spend more money on rice than beans. In addition, the weight of Education in the CCPI is only 3.94 per cent. Therefore, increase in the prices of these two items will not significantly impact the CCPI.

According to the firm, an analysis of the consumer prices it monitored across the country in September showed that the prices of beans increased by about 100 per cent while prices of rice increased marginally by about 0.25 per cent.

The drastic rise in the prices of beans was attributed to the security challenges in Maiduguri, Borno State, where beans is majorly grown in the country.
“Prices of tubers dropped marginally while the prices of vegetables remained fairly stable. Also, prices of educational materials increased on account of the beginning of the new academic session.

“Going forward, the recent flood disaster in Kogi, Benue, Anambra, Edo, Delta, Ebonyi, Bayelsa, Edo and Imo states which destroyed a lot of farmlands may lead to food shortage and cause prices of food to go up drastically to end the year, except the Federal Government releases food from its strategic reserves. The affected items are: rice, maize, yam, cassava, fish, cattle and vegetables,” it added.

Meanwhile, the Food and Agriculture Organisation (FAO) Food Price Index (FFPI) for the month of September 2012 showed that the Index averaged 216 points in September, up 1.4 per cent from August figure, after two months of stability.

The FAO Food Price Index measures the monthly change in international prices of a basket of food commodities. According to the FAO, the Index rose on account of a spike in the global prices of dairy products, meat products and cereals but decline in the international prices of sugar and oils tempered the level of the rise in the Index for the month of September.